over doing it with acoustic panels can deaden the sound too much. however unless the panels block the direct radiating sound of your speakers you are not losing detail. what you are losing is sound reflected by adjacent surfaces mixing with the direct sound, slightly out of phase causing a bit of distortion that sounds like added detail.
my room has 4 absorption / diffusion panels on the wall behind the speakers. i left 1 foot gaps between the panels to allow some reflection.
i have no side or ceiling panels, my speakers are far enough from side walls to avoid side reflections. i hear plenty of detail and have a smooth response.
rooms that have panels on every open inch of wall and ceiling space are over doing it.